Ownclasses

From the following Balance Sheets of Sonam Ltd as on 31-3-2012 and 31-3-2011.
Prepare a Cash Flow Statements:

Liabilities

31-3-2011

Rs

31-3-2011

Rs

Assets

31-3-2011

Rs

31-3-2011

Rs

Equity Shares Capital

Profit and Loss Account

Bank Loan

Proposed Dividend

Provision for tax

Creditors

1,00,000

 

25,000

 

50,000

20,000

 

10,000

15,000

 

1,50,000

 

50,000

 

25,000

15,000

 

17,500

11,250

Patents

Building

Investment

Debtors

Stock

Cash

 

 

 

 

12,500

1,50,000

-

50,000

2,500

5,000

11,250

1,50,000

18,750
63,750

3,750

21,250

 

 

2,20,000

2,68,750

 

2,20,000

2,68,750

 

 

 

 

 

Additional Information:
During the year a Building having book value Rs 50,000 was sold at a loss of Rs 2,000 and depreciation charged on Building was Rs 4,000.

 

Answer

Cash Flow Statement Activities:

 

Particulars

Amount

Rs

Amount

Rs

 

a)Cash Flow from Operating Activities

 

 

 

Profit during the year                 25,000

 

 

 

Proposed Dividend                      15,000

 

 

 

Provision for Taxation                 17,500

 

 

 

Profit before Taxation

57,500

 

 

Add: non cash and non-operating expenses

 

 

 

 

 

Depreciation

4,000

 

 

 

 

Loss on Sale of Assets

2,000

 

 

 

 

Patents Written-off

1,250

 

 

Operating Profit before Working Capital Changes

64,750

 

 

 

Less:

Increase in  current assets and decrease in current liabilities

Increase in Debtors

 

 

(13,750)

 

 

 

 

Increase in Stock

(1,250)

 

 

 

 

Decrease in Creditors

(3,750)

 

 

Profit from operation before Tax paid

46,000

 

 

 

Less:

Tax paid

10,000

 

 

Net Cash flow from Operating Activities

36,000

36,000

 

 

 

 

 

 

 

(B) Cash Flow from Investing Activities

 

 

 

 

Proceeds from Sale of Building

48,000

 

 

 

Less:

Purchase of Building

(54,000)

 

 

 

Less:

Purchase of Investment

(18,750)

 

 

Net Cash flow from Investing Activities

(24,750)

(24,750)

 

 

 

 

 

 

 

(C) Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share

50,000

 

 

 

Less:

 Repayment of loan

(25,000)

 

 

 

Less:

 Dividend Paid

(20,000)

 

 

Net Cash flow from Financing Activities

5,000

5,000

 

Net Increase in Cash and Cash Equivalents(A+B+C)

 

16,250

 

 

Add:

Cash at the beginning

 

5,000

 

Cash at the end

 

21,250

 

 

 

 

 

             

 

Working Notes:

Building Account

Dr.

 

 

 

 

Cr.

Date

Particulars

Amount

Rs

Date

Particulars

Amount

Rs

 

Balance b/d

1,50,000

 

Depreciations

4,000

 

 

 

 

Sale

48,000

 

 

 

 

Profit and loss a/c

2,000

 

 

 

 

 

 

 

Bank A/c (Purchase-Balancing figure)

54,000

 

  By balance c/d

1,50,000

 

 

2,04,000

 

 

            2,04,000